Automakers and technology companies are entering partnerships and forming joint ventures at break-neck speed. As more technology pours into our cars, automakers need ways to keep them connected for a variety of reasons. Add in car-to-car and car-to-infrastructure communication, and automakers need a way to manage the data, and one way to do that is through cloud connectivity and services. One company jumping on the cloud bandwagon is Volkswagen, which is partnering with Microsoft to develop a "comprehensive industrial automotive cloud” called Volkswagen Automotive Cloud.
The technology will allow the automaker to provide a host of services to customers such as onboard media streaming, smart home connectivity, a personal assistant, predictive maintenance services, updates and upgrades, and much more. VW hopes to add more than five million new Volkswagen-brand vehicles per year to the Internet of Things (IoT) in the cloud starting from 2020. VW will build its cloud service on Microsoft’s Azure cloud platform as well as Azure IoT Edge.
Right now, the future of cloud connectivity is up in the air as automakers begin exploring the space. The Renault-Nissan-Mitsubishi auto alliance has a partnership with Google – as does Volvo – which are both baking the Android operating system into their respective models’ infotainment systems. It’s not as ambitious as VW’s IoT idea for cars, but it is the direction vehicles are heading. If automakers plan on connecting cars and infrastructure while rolling out electric and autonomous vehicles, they’re going to need a way to manage and transmit massive amounts of data effectively to every vehicle, and a cloud-based platform solves that problem.
But that means automakers will need a lot of specific data, too, such as location and vehicle speed. Consumers have no problem giving private nuggets of information over to phone carries and technology companies now, so convincing them to do the same with automakers shouldn’t be difficult.
VOLKSWAGEN AND MICROSOFT ANNOUNCE STRATEGIC PARTNERSHIP
Sherrod Conversion VanWolfsburg (Germany) / Redmond, Wash. (USA) – Entering into a strategic partnership, Volkswagen and Microsoft Corp. will collaborate to develop the ‘Volkswagen Automotive Cloud’, one of the largest dedicated automotive industry clouds for all future Volkswagen digital services and mobility offerings. The Supervisory Board of Volkswagen AG approved the conclusion of an agreement to this effect between Volkswagen and Microsoft on September 28, 2018. Volkswagen continues to forge ahead with its digital transformation at full speed. With Microsoft as its strategic partner, the company is taking a decisive step in its digital transformation into a mobility provider with a fully connected vehicle fleet and the digital ecosystem “Volkswagen We”.
“The strategic partnership with Microsoft will turbocharge our digital transformation,” said Dr. Herbert Diess, CEO of Volkswagen AG. “Volkswagen, as one of the world’s largest automakers, and Microsoft, with its unique technological expertise, are outstandingly well-matched. Together, we will play a key role in shaping the future of auto-mobility.”
“Volkswagen is harnessing technology to digitally transform and deliver innovative new connected car services to its customers,” said Satya Nadella, CEO of Microsoft. “The world’s leading companies run on Azure, and we are thrilled that Volkswagen has chosen Microsoft. Together we will reimagine the driving experience for people everywhere.”
In-car services and platform based on Microsoft technology
From 2020 onwards, more than 5 million new Volkswagen-brand vehicles per year will be fully connected and will be part of the Internet of Things (IoT) in the cloud. The profound partnership between the two companies will lay the foundation for combining the global cloud expertise of Microsoft with the experience of Volkswagen as an automaker with a global market presence.
Together, the two companies will develop the technological basis for a comprehensive industrial automotive cloud. In the future, all in-car services for vehicles of the core Volkswagen brand as well as the Group-wide cloud-based platform (also known as One Digital Platform, ODP) will be built on Microsoft’s Azure cloud platform and services as well as Azure IoT Edge. This will dramatically streamline the technical landscape.
Via the Volkswagen Automotive Cloud, Volkswagen will considerably optimize the interconnection of vehicle, cloud-based platform and customer-centric services for all brands, such as the “Volkswagen We” ecosystem.
By building the Volkswagen Automotive Cloud, Volkswagen will be able to leverage consistent mobility services across its entire portfolio and to provide new services and solutions such as in-car consumer experiences, telematics, and securely connect data between the car and the cloud.
Establishment of digital headquarters
As part of the new entity, Volkswagen will establish a new automotive cloud development office in North America near Microsoft’s headquarters. To help usher in a new wave of automotive transformation, Microsoft will provide hands-on support to Volkswagen as it ramps up its new automotive cloud development office, including resources to help drive hiring, human resources management and consulting services. The workforce is expected to grow to about 300 engineers in the near future.
Beyond the technological rationale of the partnership, Microsoft provides access to cloud expertise across their organization so Volkswagen developers and engineers can benefit and learn from Microsoft’s strong culture of collaboration and agility and can transfer those experiences into the core Volkswagen organization.
Development of the largest digital ecosystem in the automotive industry
In the long term, the solutions developed through the strategic partnership will be rolled out to other Volkswagen Group brands in all regions of the world, building the foundation for all customer-centric services of the brands. This includes the Volkswagen ID. electric family as well as conventionally-powered models. In the future, Volkswagen’s fleet of cars will become mobile ‘internet of things’ hubs linked by Microsoft Azure.